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Volume 8, Issue 23: June 5, 2006

  1. The High Price of Land-Use Planning
  2. Beware of Oil Pundits
  3. Iranian Nukes and U.S. Denial
  4. Bureaucracy vs. The Environment: What Should Be Done?

1) The High Price of Land-Use Planning

Urban-growth boundaries, purchases of regional parks and open spaces, and various limits on building permits are supposed to make a region more livable. In reality, these and similar land-use policies have created artificial land shortages that have sent housing prices to extreme highs, lengthened commute times, and hindered small businesses, according to Independent Institute Research Fellow Randal O'Toole.

In the San Francisco Bay Area, for example, in 1970 a median-income family "could dedicate a quarter of their income on housing and pay off its mortgage on a median-priced home in just 13 years," writes O'Toole in an op-ed for the SAN FRANCISCO CHRONICLE. Over the years more land-use policies were implemented. "By 1980, a family had to spend 40 percent of their income to pay off a home mortgage in 30 years; today, it requires 50 percent."

O'Toole also notes that measures to protect the Bay Area's (marginal) farmlands have led to the reduction of more productive farmland in the Central Valley as more houses were built there for Bay Area workers. This has forced many commuters to live farther away from their jobs and worsened traffic congestion. By impeding home ownership, such policies have also stifled small-business formation: "Most small businesses get their original financing from a loan secured by the business owner's home," O'Toole writes. "Barriers to home ownership reduce this mobility and help keep low-income people poor."

See "The High Price of Land-Use Planning," by Randal O'Toole (SAN FRANCISCO CHRONICLE, 5/22/06)
"El alto precio de planificar el uso de la tierra"

This op-ed is based on "The Planning Penalty: How Smart Growth Makes Housing Unaffordable," by Randal O'Toole

For more on housing, see


2) Beware of Oil Pundits

Both magazine publisher Steve Forbes and NEW YORK TIMES columnist Thomas Friedman recently misdiagnosed the recent increase in the price of oil, according to Independent Institute Senior Fellow Alvaro Vargas Llosa.

Forbes argues that inflation is the main culprit, but Vargas Llosa argues that pursuing an aggressive "anti-inflation" monetary policy in order to reduce oil prices (and oil despots' profits) "is like draining the Caribbean to get rid of all the sharks in the world." Friedman argues for policies to curb oil demand because high oil prices undermine basic liberties by empowering despots in oil-rich nations, but this analysis is an overgeneralization, according to Vargas Llosa: Venezuela's Hugo Chavez began to consolidate power when oil prices were low, and "Mexico's political freedoms have expanded, not diminished, during the recent oil boom.

"Those who espouse clever government-led solutions to high oil prices should bear in mind that new discoveries have outpaced consumption for a number of years," writes Vargas Llosa, "but too much bureaucratic interference has hampered supply."

Here's Vargas Llosa's analysis of the oil price increases: "The main factor is a simple case of supply and demand. World demand has grown by 7 million barrels per day since 2000, with almost a third of it coming from China. At the same time, Iraq's oil production is well below prewar levels. If you add the slowdown in the expansion of Russian production and a reduction in Venezuela's output because of government incompetence, and the effect of last year's hurricanes in the U.S., you will see why traders anticipate a mismatch between demand and supply."

See "Beware of Oil Pundits," by Alvaro Vargas Llosa (5/31/06)
"Dios nos libre de los expertos en petróleo"


LIBERTY FOR LATIN AMERICA: How to Undo Five-Hundred Years of State Oppression, by Alvaro Vargas Llosa

Center on Global Prosperity (Alvaro Vargas Llosa, director)

Spanish-language Blog:
El Independent: El Blog del Centro Para la Prosperidad Global de The Independent Institute


3) Iranian Nukes and U.S. Denial

Veiled U.S. threats against Iran run the risk of creating an anti-U.S. backlash among Iran's young anti-theocratic population and exacerbating anti-U.S. hostility in Iraq, according to Ivan Eland, director of the Independent Institute's Center on Peace & Liberty.

"Any U.S. attack could spur Iran to encourage Shi'ite militias in Iraq to directly attack U.S. forces," writes Eland in his latest op-ed. "Muqtada al-Sadr, one of the most powerful Shi'ite militia leaders, has already pledged to do this if the United States attacks Iran. This chain of events would lead to the collapse of U.S. policy in Iraq -- already hanging by a thread." Furthermore, warns Eland, "if the U.S. attacks Iran, we can expect the Iranians to unleash the Shi'ite militias on U.S. forces in Iraq. In addition, any U.S. attack could also spur Iran to let loose Hezbollah -- perhaps the most competent terrorist group in the world -- on U.S. targets."

Eland also suggests that U.S. intelligence has probably been unable to identify the locations of all of Iran's nuclear sites, thus limiting the effectiveness of a U.S. air strike. "In short the United States may have to live with a nuclear Iran. Although that development is not good, it is not as bad as it seems." The risk of U.S. retaliation would probably effectively deter any Iranian nuclear saber-rattling.

See "Iranian Nukes: U.S. Denial of Reality," by Ivan Eland (6/5/06)
"Las armas nucleares iraníes: Una negación de la realidad por parte de los EE.UU."

Also see "The United States May Have to Live with a Nuclear Iran," by Ivan Eland (5/1/06)
"Los Estados Unidos pueden tener que convivir con un Irán nuclear"

THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, by Ivan Eland

THE WAY OUT OF IRAQ: Decentralizing the Iraqi Government, by Ivan Eland

Center on Peace & Liberty (Ivan Eland, director)


4) Bureaucracy vs. The Environment: What Should Be Done?

Michael Shaw, Randy Simmons, and Carl Close to Address the Independent Policy Forum, Oakland, Calif. (June 28, 2006)

Environmental quality has been a major public concern since the first Earth Day in 1970, yet the maze of environmental regulations enacted since has fostered huge government bureaucracies better known for waste and failure than for innovation and success. What can these failures teach us about how best to deal with the realities of political ecology? And how can entrepreneurship be fostered to better protect endangered species, sensitive habitats, and other environmental amenities?

Please join MICHAEL SHAW (Founder, Liberty Garden), RANDY SIMMONS (Utah State University), and CARL CLOSE (co-editor, RE-THINKING GREEN: Alternatives to Environmental Bureaucracy) for a far-reaching discussion about innovative ways to improve environmental quality.


-- MICHAEL SHAW is the owner and proprietor of Liberty Garden, a native plant oasis located near Santa Cruz, Calif., that he created using a program of seedbank management.

-- RANDY T. SIMMONS is professor of political science at Utah State University, a senior fellow at PERC: The Property and Environment Research Center, and author of two chapters on endangered-species protection in the Independent Institute book, RE-THINKING GREEN.

-- CARL P. CLOSE is academic affairs director at the Independent Institute and co-editor (with Robert Higgs) of RE-THINKING GREEN: Alternatives to Environmental Bureaucracy.

Wednesday, June 28, 2006
Reception and book signing: 6:30 p.m.
Program: 7:00 - 8:30 p.m.

The Independent Institute Conference Center
100 Swan Way
Oakland, CA 94621-1428
For a map and directions, see

TICKETS: $15 per person ($10 for Independent Institute Members). Special Offer: Admission and a copy of RE-THINKING GREEN: $35 ($30 for members). Reserve tickets by calling (510) 632-1366 or ordering online at

Praise for RE-THINKING GREEN: Alternatives to Environmental Bureaucracy, ed. by Robert Higgs and Carl P. Close:

"This superb book provides provocative, fresh insights into the debate over appropriate public policy regarding the environment."
--GARY LIBECAP, Professor of Economics and Law, University of Arizona

"RE-THINKING GREEN is a splendid book that is very adaptable for teaching. The book is clearly written and interesting, covers the environmental topics that concern us today, and features good science and economic logic."
--ROGER MEINERS, Professor of Economics, University of Texas at Arlington

"Forces us to re-think the accomplishments of environmental policy and the most effective strategies."
--W. KIP VISCUSI, Professor of Law and Economics, Harvard University

"We would all benefit if the arguments in RE-THINKING GREEN are taken seriously by environmentalists and the general public. "
--DANIEL CHIROT, Professor of Sociology, University of Washington

For information about RE-THINKING GREEN, see

For more information about the event "Bureaucracy vs. The Environment: What Should Be Done?," see


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